Banks won't lend? Use these guys instead

Banks often have exhaustive approval processes, high minimums, and flawless credit requirements. But there's a wealth of non-bank alternatives for those who need capital fast. Here are some of the leaders.

CAN Capital

alternative lending can capital
  • Financing type: Loans and merchant cash advances

What it is: CAN Capital's merchant cash advance program gives business owners access to future revenue that is paid back in small daily remittance fees. There's no fixed payment plan, rather the amount owed each day is based on that day's sales.

Four years ago, CAN Capital introduced its business loan product, which is also paid back daily. The rate is fixed and is based on a company's risk profile (including things like industry, business credit and seasonality).

Who it's best for: Restaurant owners needing extra funds to put toward expansion costs that will increase revenue in the near future.

Potential pitfalls: Mitchell D. Weiss, adjunct professor of finance at the University of Hartford, says businesses must be careful about accepting merchant advance funds -- even from a venerable company.

"You've taken next month's cash flow and you're getting it now. At any point, if you stop doing this, you have a hole," explains Weiss.

He suggests using a simple annual percentage rate, or APR, calculator, like this one from efunda.com to get the real interest rates.

Financing amounts: $5,000 to $150,000 (merchant cash advance); $2,500 to $250,000 (loans)

Interest & fees: No fixed interest rate (MCA); 9.9% to 30% plus additional fee (loans)

- Last updated July 18 2014 12:34 PM ET
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